Amid strained finances, higher ed rethinks fundraising
Institutions of all shapes and sizes are working to build and maintain better alumni relationships — and sometimes making cuts in unexpected places
With a number of factors weighing heavily upon budgets, many higher ed institutions are finding it increasingly necessary to think beyond traditional funding sources for survival.
"There are two parts of the spectrum that are really financially most stressed," John Hennessy, former president of Stanford University and perhaps higher ed's all-time greatest fundraiser, told Education Dive. "Those are our public institutions, where state revenue drops have become significant, and institutions with smaller endowments that clearly are very tuition-dependent. In an era where tuition is limited by the fact that we don’t have very high growth rates in family income, both of those are under the most stress."
Among the greatest revenue and fundraising challenges for higher ed are expanding access and financial aid, building and maintaining endowments, and staying up-to-date on facilities renewal — especially for research institutions that need to remain cutting-edge. How colleges and universities in these situations can work to address these stressors varies widely, ranging from simple advocacy approaches to more extreme measures.
Building bridges today for returns tomorrow
It may seem like common sense, but one of the simplest and most effective ways for an institution to ensure its endowment holds steady and grows is to build relationships between the institution and current students that pays off decades down the line when they've become alumni in a position to give.
"The marvelous thing about higher education is if you take institutions that have a significant philanthropic track record, basically you’ve got a situation where one generation of students is helping another get access to the same kinds of educational opportunities they had 20, 30, 40 years earlier," Hennessy said, noting that the vast majority of alumni resources come 35-40 years after graduation.
"If we can maintain that wonderful bridge from one generation to the next, I think then we’ll be able to get the resources we need to maintain what I think is widely admired as the best higher education system in the world."
Former Hollins University president Nancy Gray is among higher ed leaders who have successfully done just that. As of 2016, the Virginia women's college had seen its endowment increase $72 million to $171 million, and was able to pay off its debts at a time when Sweet Briar College, another women's institution in the state with a $68 million endowment, nearly closed its doors forever. Key to her strategy, she told us at the time, was engaging future alumnae with traditions that build a strong sense of community, like the school's Tinker Day, "when we cancel classes, have donuts, put on the craziest costumes you've ever seen, and literally hike a mountain that you cannot believe how hard it is to hike."
"Our traditions very much color our alumnae engagement, our alumnae programming, and their interactions with each other," Gray said. "And the sharing of those traditions builds a really common inter-generational tie which further strengthens their engagement with each other and this network that is there, that we're building and leveraging."
Of course, ensuring that future alumni end up in a position where they can later give back makes it all the more important that colleges and universities implement strong career services strategies and guide students into their respective career paths. Gray, for example, spoke of building social capital with alumni in a variety of career fields worldwide to facilitate better internship opportunities for current students.
But this can also play out when encouraging philanthropic donations to support financial aid. "I think many people who are interested in philanthropy and willing to support an institution find it appealing to think that they’re supporting individuals," Hennessy said. "So figuring out how you can make the connection between somebody who’s philanthropically-inclined and a young person that they’re supporting, for example, if it’s financial aid, makes the philanthropic thing much more compelling."
In that situation, institutions will want to be able to put a name with a face and provide an example of how that funding directly affected a student, providing them an opportunity they otherwise would have missed. Matching funds and challenge grants, he added, can further boost these efforts.
He also noted, however, that colleges and universities must be careful not to cross a line by letting philanthropists dictate programmatic issues, whether it’s what courses are offered, what’s taught or what research programs are done.
Confronting the capitol for capital
Much of higher ed's budget woes can also be traced back to declines in state and federal investment in recent decades.
As a result, Hennessy suggests that public institutions in particular must sell their case to politicians in an effort to get those numbers back up. This could involve discussing rising concerns around skills gaps in STEM fields and the impact on the economy.
"We’ve gotta make it it clear where that [financial] stress [in higher ed] is coming from," Hennessy said. "We have to make it clear that prior generations of students benefited, in particular at the publics, from greater state investment and hope that they would see that their philanthropy can make a difference for the next generation. We’ve gotta make that argument clear."
Extreme measures: Ditching the football team
Taking what some might consider a "nuclear option" shortly after taking office in 2007, Paul Quinn College President Michael Sorrell cut the school's football program. He joked at this year's ASU+GSV Summit in Salt Lake City that the team was expensive and "never won any games," but the move has paid very real dividends for the Dallas-area liberal arts school.
Its "New Urban College Model" has seen an increased focus on social issues and the need for academic and professional preparation that instills a "we over me" mentality, placing the community's needs over the individual's desires for the betterment of everyone. This can be most clearly seen through the replacement of its former football field with an organic farm providing an experiential learning opportunity that also addresses the food desert that existed in the low-income community around the school.
But that move also allowed Paul Quinn College to launch an urban work program in which residential students work 10-20 hours per week on- or off-campus and get a $1,000-2,000 stipend each academic year. That program allowed PQC to cut tuition by about $10,000, from $23,875 to $14,495 ($9,920 for those living off-campus), and the institution also now uses open-sourced textbooks to further save money for students.
“It is irresponsible to tell students from poverty that the way out of poverty is massive amounts of student loan debt," Sorrell told a crowd at ASU+GSV. "That is not right. We refuse to buy into that culture."
While not every institution needs to make such a move, many might take heed of what Sorrell has done and reconsider what is truly necessary and what can be redirected toward more beneficial opportunities at their particular college or university.
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